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BT is at risk of having its credit rating cut over fears that the heavy blow to profits from its accounting scandal in Italy and a slump in big contracts will slow effort to reduce its debt pile.

The ratings agency Moody’s has changed its outlook on BT from stable to negative in the wake of the company’s profit warning earlier this week.

A negative outlook indicates that BT is in danger of losing its Baa1 rating, considered a lower-medium investment grade. Lower credit ratings make it more expensive for companies to borrow as lenders view them as riskier.

Moody’s said BT, which is due to issue its third quarter financial update tomorrow, was already more indebted than it would normally allow...